Pellet Production in Wisconsin’s North Woods

A bit more than an hour north of the college town of Eau Claire, Wis., sits Ladysmith, the county seat of Wisconsin’s Rusk county. Nearly 30 percent of the county’s workforce of about 8,000 people makes a living in the manufacturing sector and, with 80,000 acres of forest land in the county, the forest products industry plays a vital role in the area’s economy.

In 2009, looking to maximize on the area’s significant wood fiber assets, Illinois-based Indeck Energy Services Inc. broke ground on a pellet facility sized to produce nearly 90,000 tons of wood pellets annually when running at maximum capacity. Initially eyeing the area for the development of a biomass power plant, Indeck Energy Services and minority equity partner and feedstock aggregator Midwest Forest Products Co. pivoted their plans and brought this facility online to begin producing pellets in July 2009.

Utilizing about equal portions of the area’s abundant sawmill residuals and whole round logs, the facility operates largely on hardwood fiber streams. “Predominantly what we are using is mixed hardwoods. The majority is medium- to high-density hardwoods. That includes red oak, hard maple, soft maple, ash and birch,” notes Darren Winchester, quality control manager at the plant. Feedstocks drive the facility’s final product quality, Winchester continues. “One good way to look at quality is consistency and the consistency does start on the front end. For us, we maintain a product recipe that calls for a certain percentage of our various wood species.”

The facility’s wood yard is arranged into logical zones—evidence of its ability to accept and process both whole round logs and sawmill residuals. Whole round logs are received, debarked and fed into the facility’s 600 horsepower chipper. The chips are sorted by species by the yard’s radial stacker and the bark is sold to nearby boiler operators. While the Btu from the bark could be put to use on the premises to power the dryer, the air permit required to burn this higher moisture content material makes that option impractical. Instead, the plant utilizes about 10 percent of its dried furnish (wood fines) to run the dryer.

Pellets are bagged and stacked on pallets for delivery to the plant’s significant roster of dealers. “There are more than several hundred outlets in the Midwest that carry our product, from various big boxes to a lot of independent and private dealers like wood yards and small mom and pop hardware stores. So there is a myriad of outlets for our product and we’re certainly always looking to increase that number,” reports Nunzio Maniaci, business development manager. The plant covets the growth opportunity afforded by landing critical bulk delivery customers. “Our bulk customers are some schools and municipal buildings that have pellet appliances that allow them to heat their facility by burning pellets. There aren’t too many of those and it is not growing fast enough, probably, to suit us,” Nunzio says.

The plant is well-positioned to service bulk customers, being unique among Midwestern pellet facilities in boasting onsite rail access. Ideally, the facility would locate a utility deploying biomass cofiring to drive some major demand. The plant had some early traction in this effort and, Nunzio reports, “we had one test two years ago with a large utility here in Wisconsin that burned a large number of tons of pellets.” Those tests, however, never progressed beyond test fires and Nunzio is skeptical of near-term domestic utility demand for wood pellets saying, “That market just doesn’t seem to be maturing right now.”

Not surprisingly, the entire management and operations team at Indeck are closely watching the maturing market for wood pellets in Western Europe, led by the demand from power plants in the United Kingdom. Moreover, foreign pellet buyers are reaching out to Indeck. “We get requests daily from them for large amounts of pellets to go different places: Italy, Germany, Sweden, and the U.K., specifically,” Nunzio says. “But we haven’t been able to get over the price hurdle, yet. Demand keeps going up and we think that will drive the price up and eventually we are going to get there.” Until that day, the team at Indeck Ladysmith LLC will continue to produce high quality pellets for their domestic buyers.